Westpac hikes fixed rates

From AAP:

Westpac Banking Corporation Ltd has increased its fixed interest rate on a two-year loan, in a move that has fuelled speculation the lender is expecting an end to the Reserve Bank of Australia’s monetary easing cycle.

In February, Westpac reduced its rate on a two-year fixed-term home loan to 4.99 per cent per annum, but has today increased that to 5.19 per cent per annum.

The move is the first increase to a fixed home loan rate by a major lender in almost two years.

Loan Market spokesman Paul Smith said after nearly two years of downward movement on fixed interest rate home loans, it was now likely other lender’s would follow Westpac’s move.

Bill Evans of Westpac is still calling a June cut this looks to me more like pulling the bank back from its uber low 4.99% special, not any acknowledgement of higher rates to come..

David Llewellyn-Smith
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Comments

  1. So, how long will it be before people start feeling mortgage stress since the good days are passing and interest rates are set to hike up again. Maybe this will also put a damper on the property market for new entrants, though foreign investment and a ton of students did this years ago. Poor locals.

  2. TheRedEconomistMEMBER

    Nice.

    Westpac through their RAM’s offshoot raised there Online saver by 0.2% last week. Now paying 5.01%

    Let hope the other banks follow suit.

    Too much cheap credit out there.

    Reward the Saver and not the speculator.

    • Assuming that growth solves a lot of problems and we are, as a nation, addicted to it, then savers aren’t the ones who get rewarded, it’s those who invest in growth.

      Savers only get rewarded when the economy overheats (as shown by demand pull inflation) and the RBA needs to encourage saving to slow the economy because it is too unpalatable politically for politicians to raise taxes or cut spending to take the heat out of the economy,

    • Yes, you are right about cheap credit, the bank told me I could borrow just over 1 million the other day, all I wanted to know was how much there car insurance was, it was ANZ, their priced SUCKED for car insurance compared to Budget. But they are handing out credit like candy to kids.

    • No need to reward the saver, just breaking even after tax and inflation is good enough. But we aren’t even getting that.

  3. Tassie TomMEMBER

    I wonder if there’s a bit of “Where are we going to get the money from when the Cyprus thing blows up?” involved in this decision?

    Cash preservation? Deleveraging?

    One can only hope.